Saturday, October 16, 2010

"Many of working class living in the heartland do not see much benefit from having so many rich people around – but they feel the pain of rising costs " - Seah Chiang Nee, The Star

"'Supposing the world's richest man, Carlos Slim, comes to live in Singapore. The Gini coefficient will get worse. But I think Singapore will be better off. Even for the lower income Singaporeans, it will be better,"- PM Lee, 27 Mar 2010 [Link]

For ordinary Singaporeans to benefit from rich people coming here a few things have to happen - they are here to create well paying jobs (and not exploit cheap labor), they pay taxes under a highly progressive tax structure, and they do not drive up the cost of living for Singaporeans. What you don't want is have rich people come here to compete for limited resources such as housing and medical services - they will price out your own citizens and local Singaporeans will lose out. There was a good point made by an American writer Joel Kotkin said that Singapore should not try to expand the middleclass by importing it - it is only beneficial if it is created from within our own society[Link]. Importing richer higher skilled foreigners can result in the formation an underclass and ultra-underclass among native Singaporeans as the cost of living is driven up by a rate not that cannot be matched by the growth of their incomes.

Very often importing foreigners makes the numbers look good e.g. Singapore is 4th highest in per capita wealth. You can get such achievements by attracting the likes of Jet Li, Jacky Chan and rich Indonesians by offering them a kind of tax haven to park their wealth here. However, this seldom translate to any benefits for ordinary Singaporeans less the few who work as investment bankers who are already overpaid for what they do thereby further widening the income gap even more.

Many of working class living in the heartland do not see much benefit from having so many rich people around – but they feel the pain of rising costs.

A LUXURIOUS 7,072 sq ft penthouse at a prime district has just changed hands for S$30mil (RM71.46mil) in one of the most expensive deals on a per square foot basis. The buyer was a permanent resident from Hong Kong and the seller an Indian tycoon who had bought it in 2006 for S$17.3mil (RM41.21mil).

The cost of the triplex with five bedrooms and an 11m swimming pool worked out to S$4,242 per sq ft, a record in land-scarce Singapore.

Last June, an unknown Chinese national snapped up a bungalow on Sentosa Island for S$36mil (RM85.77mil), the highest paid for a residence here. The PR holder from China had considered the price a bargain, according to the agent who handled the sale.

These are among a rising number of wealthy foreigners – especially Chi­nese, Indians and Indonesians – who have made this city their family residence while doing business outside.

Asia’s growing wealth, particularly from China and India, is slowly making its way into Singapore. More Europeans, too, are parking their money here.

For a glimpse of a Singapore in, say, another 10 or 15 years, just take a picture of Monaca or Zurich and superimpose it on this island. What will emerge is a city of wealth – transient and abiding, a land of personal banking, celebrity-chef dinners, where Bentleys, Lamborghinis and Ferraris ply the street and branded goods will become daily items.

An example of the foreign presence can be gauged at Sentosa Cove, one of Singapore’s most posh and expensive waterfront projects.

More than 3,000 people now live there. They have come from 22 countries, the top five nationalities being Singaporeans (who make up 40%), Australians, Britons, Germans and Chinese.

“Singapore has opened up a lot in recent years and we’re drawing foreigners keen to park their money as well as live here,” a developer said.

The arrival of the nouveau riche has created new fortunes for Sing­apore’s upper middle class, but it has also widened the economic gap between the rich and the poor as few of the lower class derives much benefit from the phenomenon.

For the upper class, the story is clear. Last year the number of millionaires jumped by 26%. Currently, 11.8% of Singaporean households have at least US$1mil (RM3.09mil) in investible assets (excluding property) each.

Some recent headlines gave an indication of the change, good and bad.

A Singaporean billionaire, Peter Lim, has just made a US$507mil (RM1.56bil) bid to buy England’s Liverpool football team. And two Singaporeans displayed their wealth less gloriously at the casino tables. One, a company managing director of a seafood business, lost S$26mil (RM61.95mil) in just three days, while the second, who was in the latest Forbes list of Singapore’s 40 richest people, dropped S$100mil (RM238.27mil). Easy come, easy go!

Cashing in on it, Citibank last week launched an exclusive Ultima credit card for the super rich in Singapore where members must have S$5mil (RM11.9mil) and admitted only by invitation.

Some of the nouveau riche came because of their children’s education. Among them is action star Jet Li, who bought a bungalow for S$19.8mil (RM47.15mil) last year. He took up citizenship and sent daughter, Jane to study here.

Another new settler, US investment guru Jim Rogers, with a net worth of US$1.8bil (RM5.55bil), also came to send his daughter to the reputable Nanyang Primary School two years ago.

To ensure she got a better chance, Rogers and his wife had performed 40 hours of volunteer work, something the locals do.

Who are the richest foreigners living here?

The Forbes’ list of top 40 ranks China-born Zhong Sheng Jian, 48, as the fourth richest man in Singapore with a net worth of US$2.5bil (RM7.71bil). And 47 year-old Indian-born Sudhir Gupta, now a naturalised citizen is ranked 13th richest. He has a personal fortune estimated at US$320mil (RM987.3mil).

Seventeen percent of foreign buyers of high-end property in the first quarter are Chinese, and the number is rising. One out of five bought houses in prestigious multi-million dollar districts of 9 to 11, the Central Business District (CBD) and Sentosa.

Some salesmen have reported cases of Chinese buyers paying the down payment with a bag of cash, leading to suspicion they may be keen to cover the money trail.

Recently a growing number of foreigners have turned to buying landed properties.

Under the law foreigners, including PRs, cannot buy any property on land or any apartment with fewer than five storeys – except with special approval. Under its strategy of attracting the wealthy and talented to settle here, the government appears to be loosening the screw.

In the first half of this year, 150 such sales were allowed, most in the prime, rich areas.

Local critics are protesting against such sale of precious landed properties. “It is like selling the country’s Crown Jewels to outsiders,” one blogger wrote.

The influx of foreign wealth is not welcomed by all Singaporeans. Some see their cake becoming smaller and more expensive.

Many of working class citizens living in the heartland do not see much benefit from having so many rich people around – but they feel the pain of rising costs.

A polytechnic student asked: “And what happens to us when they suddenly take their money and go home?”

32 comments:

Anonymous
said...

It will be the richest country in the world without having to work for the wealth.However, the poor locals will have to work till they drop dead.Thank your local masters for bringing in the fortunes that you have absolutely no share in.No sweat for the state and its' managers to bring in and share the fortunes.But, the poor locals will have to work till their bloods stop flowing for a pittance.

The situation in Singapore is only good for the rich and the elites. Most of my richer relatives go thru their daily living in a cocoon, never stepping foot in a HDB estate, never going into MRT, never squeezing with shopping mall crowd --- they live a pretty refined existence with exclusive boutique private sales and invitations to exclusive posh parties etc. They don't have much opinion of PAP except for a feeling that "things are as they should be". The rich attitude is that different people have different status and level in life --- if you are poorer, you should act your status and don't complain. If you manage to become rich, then you can have privilege to mix with the higher level. When my relatives read about jobless PMETs they just say why complain and be lazy? Just go and become security guards or drive taxi. Beggars can't be choosers. When they read about underclass with 3rd world wages, they will say that certain people are unsuitable for modern life. These people should not have children to continue the underclass. They should be left to die out.

Is it accurate to say that many bloggers are mostly professionals and some are doing very well in the financial services sector ? And that they are the very people that are helping the rich to be richer?And oh yes, they may make some investors poorer, though it is never their aims to do so.Most blogs are centred on the national economic developments and their effects on the people, well and good. Many have observed that the increased wealth of the country does little to benefit the poor, quite on the contrary, it causes hardship.Is there anyway bloggers can go about making suggestion or guiding the poor, weak and sick to manage their lives liked the way financial adviser and specialist go about managing the wealth of the rich? It comes a point where and when one feels that the bloggers are helping the successful and the rich more than doing any good for the underclass.Could it be that this lay person here is too ignorant and not able to comprehend worldly matters?

Nothing is further from the truth. I am an example of the underclass surviving on the largeness of the Church, the UN milk program (45 years ago), good neighbours. As 5th in a family of 10, we were perpetually sleeping in the corridors of Blk 81 Redhill Lane. There were plenty of kind hearted souls who helped us. Today as I sort of crawled out of that hole, with my limited resources, I go on to help others. That's what it should be. I hope more of the richer populace does likewise. DT

The time of Singapore womenfolk having to work as maids will be upon us soon - and they don't have to travel abroad to work. They can work here in their own homeland. The Supreme Forecaster has got it wrong again - no need for incompetent opposition to bring this about, his own extraordinarily talented A-Team can achieve this, and sooner.

Interesting point that Joel made regarding Singapore two critical success factors:

Singapore possesses two great natural advantages: a strategic location between the Pacific and Indian Oceans and a motivated population.The city's leaders have done a brilliant job of capitalizing on both

"Local critics are protesting against such sale of precious landed properties. “It is like selling the country’s Crown Jewels to outsiders,” one blogger wrote."

and how could SAF not march our army boys past these properties for their recent BMT Passing Out Parade, as a sombre reminder that the treasonous PAP is selling Singapore by the sq.ft, and these foreign-owned properties are what Singaporeans have to defend?

Here is a state that's like a typical little convenient store, one to two employees are all that's needed to run it efficiently. Security measures are comprehensively implemented and though there are some infringements of order, the store is not expose to serious disorder. What the store owner needs to do is to attract as much big customers as possible. Sin is very much such a store, superb location, free from natural disaster. Traffics aplenty and heavy. It is very safe for its' inhabitants, local or foreign and their possessions and assets. The only question related to the only problem in this store is despite the good traffic and business, the workers have to work longer hours with no increase in salary, less rest and less time with love ones. Working life becomes more miserable so to say. The profits benefit only the Owner(s) while the workers are made suckers. Not a pretty picture though business is roaring.How much more can workers bear with the exploitation and bullying ?

What's wrong with Singaporean women working as maids? It is an honest living. Are Singaporean women so special that it is beneath them to work as maid? As long as they are fairly paid for their effort and not exploited, that's is just as honourable way of making a living as a CEO of a big corporation.

In fact, there is nothing wrong with Singaporeans to work as construction workers or shipyard workers or any profession that is available out there. In many developed countries, local citizens work as maids, construction workers and street sweepers.

It is the setting of the wages for these low skilled jobs that is causing huge income gap in the country. The relaxed restriction on importing unskilled labour that artificially depressed wages for these low skilled jobs that many created this delusion that there are jobs that are below the station of a Singaporean.

I personally know classmates and colleagues at work whose mothers worked as maids and still managed to put their children through university. No one wants to be a maid, not a Singaporean, a Filipino or an Indonesian, but someone has to put food on the table!

It's really sad that despite many Singaporeans' pertinent questions and doubts about the PAP's economic policies as well as Temasek Holdings' investment outcomes, our local media chooses to remain in cahoots with the PAP govt. Rather than ask probing questions to serve the interests of our country, they choose to jump on the PAP bandwagon of demonising political opponents instead. I hope that our journalists can reflect on this, and realise their true professional calling for the sake of our country.

Any journalist who asks probing question will be out on the street looking for another job before the day is out. With SPH the only employer for this profession in the country, where do you suggest these unemployed journalists go? Even foreign media organisations have their publications restricted/banned and fined when they published anything unfavourable about the ruling party, how do you expect local journalists to uphold such ideals like reporting the truth. Journalists are like you and me, they also have their family to look after. I don't envy them for having to betray their conscience everyday at work.

The important thing is for the general public to realise SPH's publications are merely government propaganda. Just like newspapers in Communist China. If all of us take that approach, it will be easier for us to discern the truth. Besides, most people do look for alternative sources of new on the internet. SPH's publications has just a much credibility as many of the crazy rantings we read in the blogs these days. In any case, even in the liberal democratic west, newspapers be it left or right leaning publish according to the editor's agenda. All news are biased. It's an art to be able to find the substance among all the fluff.

Our SPH journalists have more important things to write about; about singlehood, about getting married in their mid-40s, opposition parties infighting, or about how the love btw MM and his wife can "touch a nation".

Who will bother to write an indepth article of how the rich-poor divide is hurting our nation?

Funny isn't it ? In such a tiny spot like Singapore, the inhabitants are not using their own eyes and ears, but have to depend on reported news and opinions. Singaporeans dont know how to look at things themselves ? And discern, reason and decide for themselves ? Nor wonder they call each other sheeple.How can the inhabitants in a first world country be so naive and simple.Amazingly unbelievable !

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